Net income earned by China's rural residents per capita rose by 4.3 percent last year compared with a year ago to 2,622 yuan (US$315.90), the National Bureau of Statistics said. 

The income growth, although it has met the year's national target of 4 percent, is still slower than the 4.8 percent rate recorded for the previous year, and is also significantly lower than the 9.3 percent income growth for the nation's urban dwellers.

Last year, the country's gross domestic product grew a year-on-year 9.1 percent, the fastest rate since 1997.

Yao Jingyuan, chief economist of the statistics bureau, said reduced grain production due to natural disasters such as droughts and floods, as well as the outbreak of SARS (severe acute respiratory syndrome) are the major reasons for the slow income growth for China's rural population.

"The SARS outbreak during the first half of last year had a great impact on rural income," he said.

In the second quarter, when the SARS epidemic was at the most severe period, the per capita income of rural workers dropped by 35 yuan (US$4.20), because many migrant workers returned to their homes from cities, Yao said.

During the past few years, income earned by migrant workers usually accounts for about 70 percent of the increased income of the year, said Xie Yang, a senior researcher with the State Council Development Research Center.

SARS also had some impact on the sale of agricultural products, Xie said.

Farmers found they were unable to sell their products abroad because foreign countries set technical barriers for domestic farm goods, he said.

The slow growth of income for China's rural population has long been a headache for the central government, because it has greatly affected the implementation of the demand-stimulating policy, said Xie.

"If consumption in rural areas cannot be stimulated, the full expansion of domestic demand, a strong engine for economic growth, will not be realized," he said.

Presently, China's rural population, which accounts for more than two-thirds of the country's total, contributes to only one-third of total consumption.

"Slow income growth will hinder overall economic development and even undermine social stability," he said.

Yao said the central government has worked out and will continue to work out new measures to increase the income of rural residents in the years to come.

President Hu Jintao earlier said that increasing the income of rural people and the development of agriculture are essential for the sustainable and co-ordinated development of the national economy, as well as social stability.

Efforts are required to promote strategic restructuring of agriculture and the rural economy, facilitate the industrialization of farming, boost investment in agriculture and rural development, continue tax reforms in rural areas, and move to raise income for agriculture workers, especially for grain producers.

Greater efforts should be made to help surplus rural laborers find jobs in cities, while removing discriminatory regulations and unreasonable charges for migrant workers, Hu said.

China should formulate the most stringent system in the world to protect farmland from being depleted for excessive industrial development, and the illegal use of farmland for non-agricultural development should be halted, he said.

When the rural residents get more income and increase their purchasing power, the vast countryside could be turned into a big market for industrial products and boost growth.

(China Daily January 26, 2004)